Coal India has awarded 23 discontinued underground mines to the private sector on a revenue sharing model as the mines seemed financially unviable to the state-owned company, it said on Wednesday.
The cumulative peak rated capacity of the 23 mines is 34.14 million tonnes with an estimated total extractable coal reserves at 635 million tonnes.
The company had earlier identified 34 mines with good quality of coal reserves which were discontinued as these were not financially viable for CIL. The company had then decided to tender and offer these mines to private sector players who were willing to share part of the revenue with CIL.
The company had signed non-disclosure agreements with the private operators with the contract period extending up to 25 years. As per the contract, the minimum revenue to be shared is 4%. Moreover, the mine operator can utilize the existing infrastructure and project facilities without any additional payment to the authority.
Of the 34 identified mines, 10 mines each are located in the West Bengal based Eastern Coalfields and Jharkhand based Bharat Coking Coal, both subsidiaries of CIL. Five such mines belong to Western Coalfields, four to South Eastern Coalfields, three to Mahanadi Coalfields and the remaining two belong to Central Coalfields.
The mine operator will be responsible for selling coal mined from these mines at market driven price through an auction process on behalf of Coal India. “They shall have the freedom to adopt their preferential method of technology and deployment of mining machinery to extract coal from the mines.,” the company said.
The company is now identifying a few more mines for the purpose to attract wider private participation with some relaxation in the bid norms.
Of the total quantity of coal sold exclusively for coal gasification or coal liquefaction purpose in a year, a 50% on contracted percentage of revenue share of the authority will be provided to the operator, the company said.